South Australia named Australia’s best-performing economy

The report compared Australia’s states and territories on eight key economic indicators: economic growth, retail spending, equipment investment, unemployment, construction work, population growth, housing finance, and dwelling starts.

Hot on South Australia’s heels is Western Australia, which leads the country for relative population growth and home lending, thanks to the investor frenzy which has swept the state.

Victoria comes in third place, while the ACT follows in fourth place.

At the bottom end of the performance are NSW (seventh) and the Northern Territory (eighth), which fare poorly for retail spending and housing finance respectively.

“Across the country, the economic performance of Australia’s states and territories is being supported by both strong employment and population growth, at a time of higher-than-desired price inflation,” said CommSec senior economist Ryan Felsman.

“South Australia’s continued high ranking is being driven by a solid job market and construction activity.

“While South Australia retains first place, Western Australia is seeing the strongest annual economic momentum, so it will be interesting to see how this plays out in the coming quarters,” he said.

While results vary between states and territories, house price growth and housing finance are generally strong across Australia. In Western Australia, where price growth is highest, home values see an annual lift of 23.6 per cent, while housing finance across Australia has grown 15.6 per cent.

Dwelling starts, however, remain low at -9.0 per cent, while construction work sees only a slight lift of 3.8 per cent.

Looking ahead towards the months to come, Felsman noted that interest rates and employment will determine the nation’s economic future.

“Generally speaking, state economies have slowed as consumers respond to higher borrowing costs and price pressures. The future economic path will be dependent on the resiliency of the job market and interest rates,” he said.